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Re: Foreign ER & Taxes
Old 06-15-2005, 07:37 AM   #21
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Re: Foreign ER & Taxes

Hi Saver,

I cannot get to what you refer with <<May I ask what a 10% consumption tax is for? >> We have a 10% (a bit more now) social contribution (it's just a tax !) but the government calls it social contribution as it sounds better ! 10% made of CDRS and CSG (one to repay the social debt, i.e. CRDS), the other (CSG) to keep digging the hole in the danaides barrel of the social wellfare ! This applies on nearly every income and cap gains. This is how you reach (for non-professionals) 26% on cap gains on financial markets (16% tax + 10% social contribs). Those 10% add on all other taxes, e.g. tax on income (salary), on real estate income, on cap gains, etc.

The link you gave provided a comprehensive and correct picture on French Taxation. They even updated their thresholds on wealth tax so that it would match the 2005 figures. Those I provided came from 2004 plus 1,7% (then IRS rounded up numbers as I noticed in the last printed material I received).

The only thing which they do not seem aware of, is that cap gains on real estate have been simplified and mapped to cap gains on fin markets. 26% max over the first five years, then 10% discount per year (e.g. after ten years 50% discount on 26% =>13% taxation) and after 15 years therefore you break free of tax.


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Re: Foreign ER & Taxes
Old 06-15-2005, 08:15 AM   #22
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Re: Foreign ER & Taxes

Originally Posted by LEX
Its amazing that Americans have the the IRS following them globally. Perhaps dual citizenship is not a bad idea from a tax planning/expat stand point.

Here is an interesting link on the subject.

I have dual citizenship, (Triple in fact [3 legit passports]) because I have lived all over the place and applied for citizenship before I left each of my non birth countries.

We have no income other than interest income from fixed income investments. I paid taxes last year in the US and was quite happy to, even though I spent more than 10 months away. I did not stay in any other country more than 6 months either. Doesn't the problem only occur if you get income from other countries. Also if all your investments are in the USA, is it not easier to simply file taxes there. US taxes are pretty low compared to Europe and Canada. Unless you are living in Asia then I guess it is different. Being ER'd our combined income is less than $60k per year. We have some tax credits left over from our working years that will take about another 3 years to use up.



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Re: Foreign ER & Taxes
Old 06-15-2005, 11:43 PM   #23
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Re: Foreign ER & Taxes


Good points.* My DW is also a three passport holder, including the US, and one that has no tax treaty with anyone, and even if they did they would most likely not honor it.*

I have thought about this scenario: what if one were wanting to invest in say, a Tax harbor like Switzerland, the Caymans or Malta, and wanted to live offshore on the proceeds from this investment and otherwise lived without any income in the US,* this might prevent US taxation, perhaps from a practical stand point, since even if there are tax treaties, the country where the investment was domiciled would act on the citizenship basis of the registered non-US account holder.* I suppose one would have to declare the income if one were to bring the income into the US. The US tax code is so complicated that I doubt even the IRS understands its nuances in this situation, though I expect when in doubt the IRS default position is that they have absolute impunity to tax everyone everywhere for everything.* *

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